2. Objectivity
The principle of objectivity is a fundamental principle in the accounting profession, requiring accountants to be free from bias, conflict of interest, and external influences that may affect their professional judgment. Objectivity ensures that accountants maintain independence, fairness, and impartiality in presenting financial statements and providing accurate and reliable information to the public. However, in the PT Asuransi Jiwasraya financial scandal, this principle was significantly violated by the accountants and management involved.
a. The Influence of Management on Accountants
One of the violations of the principle of objectivity in the Jiwasraya case was the influence of company management on accountants involved in preparing financial statements. Ideally, accountants should uphold independence and not be influenced by pressure or direction from interested parties, including management. However, in the Jiwasraya case, accountants allegedly followed management instructions to manipulate financial statements, so they were no longer acting objectively in carrying out their duties.
b. Dependence on Stakeholder Decisions
The principle of objectivity also includes freedom from external influences, such as shareholders, investors, or other stakeholders. In the Jiwasraya case, there are indications that accounting decisions were not entirely based on an objective assessment of the company's financial condition, but were influenced by the interests of certain parties in maintaining the company's image in the public eye.
c. Conflict of Interest in Decision Making
A conflict of interest is a situation in which an individual, including an accountant, has a personal interest that may affect his or her judgment in carrying out his or her professional duties. In the case of Jiwasraya, it is possible that some individuals involved in financial reporting and investment decisions may have a conflict of interest, leading to a lack of objectivity.
d. Investment Data Manipulation
One real example of a violation of objectivity in the Jiwasraya case is the manipulation of data related to the company's investments. Jiwasraya invested in high-risk products, but the investment data was reported inaccurately. The accountants involved should have provided an objective assessment of the risks and potential losses of the investment, but instead presented information that did not reflect the actual conditions.
e. Failure to Maintain Independence
